Tuesday, August 25, 2009

This posting was written by Darius Sturmer, Editor of CCH Trade Regulation Reporter.

The Department of Justice announced on August 20 that it has reached a proposed settlement with California-based semiconductor device maker Microsemi Corporation, requiring the company to divest all of the assets it acquired from rival Semicoa Inc. in July 2008.

The Department challenged the deal in December 2008, alleging that it eliminated or reduced competition in the development, manufacture, and sale of certain semiconductor devices used in critical military and space programs, thereby resulting in increased prices and slower delivery of components essential to the security of the United States.

The devices at issue—small signal transistors and ultrafast recovery rectifier diodes—are used to control the flow of electric current. Both are used in critical military and civil applications, ranging from satellites to nuclear missile systems.

Prior to the acquisition, Microsemi and Semicoa were the only manufacturers of small signal transistors qualified for these applications and were each poised to become qualified for their ultrafast recovery rectifier diodes, which were in short supply, according to the Department.

The proposed settlement—which has been filed but not yet approved by the federal district court in Santa Ana, California—would resolve the lawsuit.

The action is U.S. v. Microsemi Corp. A news release on the settlement appears here. Other documents can be found here on the Department of Justice Antitrust Division website.

. . . While Approving Oracle’s Takeover of Sun MicrosystemsOracle Corporation and Sun Microsystems Inc. announced on August 20 that the Department of Justice has approved their proposed combination and terminated the waiting period under the Hart-Scott-Rodino Act.

The deal—valued at approximately $7.4 billion, or $5.6 billion net of Sun’s cash and debt—was approved by Sun’s shareholders on July 16. Closure awaits certain other conditions, including clearance by the European Commission, which has until September 3 to decide whether to allow the acquisition or launch an investigation into its legality.

Sun and Oracle initially announced the proposed acquisition in April. According to company statements, the deal is aimed at combining “best-in-class enterprise software and mission-critical computing systems” so that Oracle could engineer and deliver an integrated system—applications to disk—to its customers.

A press release on the Department of Justice’s approval of the deal appears here on the Oracle website.